Ford to spend $700 million on Kentucky truck plant and create 500 jobs

LOUISVILLE, Ky. (WDRB) — Even as it invests billions in electric vehicles, Ford Motor Co. is also making sure its gas-guzzling cash cows keep rolling off the line at the Kentucky Truck Plant in Louisville for many years to come.

The Detroit automaker said Tuesday it will spend $700 million on equipment upgrades and create 500 full-time jobs at the plant, which makes Ford F-Series Super Duty pickup trucks as well as the Expedition and Lincoln Navigator SUVs. The announcement coincides with the build of the 2023 Super Duty, the vehicle’s first wholesale redesign since 2017.

Kentucky Truck, the larger of Ford’s two Louisville plants, currently employs about 8,500 hourly workers and about 250 corporate employees, according to a Ford spokeswoman.

John Savona, vice president of manufacturing and labor affairs for the Americas in Ford’s gasoline-powered car division, said the $700 million is for “updating or adding new equipment throughout from the factory to make sure we are ready for the contents of the new truck”.

He said the upgrades were “mostly machinery” because the plant’s eastern Jefferson County footprint is at its maximum. Savona would not discuss details of Super Duty 2023 until an unveiling event scheduled for Tuesday evening at Churchill Downs.

The announcement comes a year after Ford and its Korean partner SK Innovation revealed a $5 billion plan to build a pair of electric vehicle battery production plants in Hardin County, Kentucky. The automaker plans to increase sales of electric vehicles to half of its portfolio by 2030.

Tuesday’s decision shows how, despite its electric vehicle ambitions, Ford has no plans to cut back on investment in internal combustion products like the Super Duty. The trucks, from the F-250 to the F-550, range from $40,000 to $97,000 depending on model and options and are among the company’s most profitable products.

This year, Ford began selling an electric version of its popular F-150 pickup, the F-150 Lightning. But it’s unclear if or when the company will pursue an EV version of the larger Super Duty trucks, which are often used for heavy-duty jobs like construction.

Asked about the future of big trucks as Ford transitions to electric vehicles, Savona said: “What we’re producing here with the Super Duty and the capability it gives our customers, we just don’t have – nobody doesn’t have the technology today to do what our customers expect (in electrical form), so we think we have a long and strong future here.”

Ford’s Super Duty production at KTP was down about 12% in the first half of 2022 compared to the same period in 2021, according to WDRB’s analysis of company numbers. The plant produced 135,428 Super Duty trucks in the first half of the year.

Ford’s F-Series franchise, which includes the non-Louisville-built F-150, has suffered a sales slump since 2018. Ford does not release sales figures specific to Super Duty models.

But the drop in sales and production is tied to supply issues such as the global shortage of microchips, rather than a lack of demand for big trucks.

“These trucks are sold out before we build them. There’s a wait,” said Todd Dunn, president of UAW Local 862, the union representing KTP’s hourly workers. “Our main goal is to focus on, how can we get the products out of here?”

“We have teams working hard to maximize production at all of our plants, including the Kentucky Truck Plant,” Ford spokeswoman Kelli Felker said.

The factory is hiring now

Kentucky Truck currently hires “temporary” production workers, who work full-time but do not enjoy the same benefits and job protections as regular full-time employees. These jobs can be found at this link by searching for “Louisville” in the location field.

Felker said temporary jobs are currently the only avenue for new hires at the Kentucky Truck Plant, but employees are often converted from temporary to permanent status within months. Under its 2019 contract with the UAW, Ford must convert temporary workers within two years.

Starting hourly pay at the plant ranges from $16.67 to $19.59 depending on the team and shift, Felker said.

New jobs cost taxpayers

Ford’s latest spending on the massive plant it has owned since 1969 is costing taxpayers in Kentucky and Louisville Metro: $150,000 per new job, according to WDRB analysis.

On Tuesday, the Kentucky Economic Development Finance Authority extended a special incentive the state passed for Ford in 2007. The incentive program grew out of an effort to convince the automaker not to close its other plant across the city, the Louisville Assembly Plant, at the start of the Great Recession.

Over the past 15 years, state officials have expanded and softened the 2007 deal six times as Ford outlined plans to spend money to upgrade plants and sometimes create jobs. Tuesday’s expansion is the latest.

Kentucky increased the total incentive available to Ford by $75 million to $430 million from 2007-26. Ford had already claimed $315 million and will have an additional $115 million available through 2026.

“This is a special partnership. Ford is an important part of the Kentucky team, and together we will build the automobiles and trucks of the future for many years to come,” Governor Andy Beshear said. to reporters during the announcement. Tuesday, before details of the incentive program were made public.

Brandon Mattingly, Beshear’s spokesperson for economic development, said in an email that the incentive agreement “takes into consideration several key factors, including job creation/maintenance and the importance of investment”. He did not dispute the analysis of $150,000 per new job.

“In addition to the creation of 500 jobs and a $700 million investment in equipment, new technologies and a new product platform, the agreement contemplates the continued employment of the base of ‘existing Ford employees of more than 12,000 employees,’ Mattingly said. “…The incentives also reflect the additional four years of economic activity associated with the scale of the investment in a new product platform, which extends benefits to the Commonwealth and facility employees. As always , the incentives must be earned.”

Ford will be able to claim $20 million to $25 million per year from Kentucky from 2022 to 2026 if it achieves the goal of 12,500 employees between its two Louisville plants, or a prorated amount as long as the total number of jobs is d at least 11,000. The state said Ford’s current employment between the two plants is 12,200.

The new jobs will have an “anticipated average total hourly earnings” of $29, which includes the value of benefits like health insurance in addition to cash wages, according to documents from the Financial Authority. It’s $60,320 a year.

“We should do the math on these projects, not just what’s politically advantageous,” said Jim Waters, president of the Bluegrass Institute for Public Policy Solutions, a free-market think tank that has long criticized the programs of ” Enterprise Wellness” of Kentucky for large corporations.

“If you’re talking about the economic benefits of creating jobs, if taxpayers get more or even a similar amount to work, where’s the benefit to the taxpayer and where’s the benefit to our economy?”